Global insurance industry regulators plan to come up with a basic outline of common rules on solvency requirements for international insurers by January, according to a report seen on the Web site of Japan's financial watchdog Tuesday.

The drafting of such rules would be a step toward creating a crisis-prevention framework to pre-empt a global industry meltdown like the one that nearly brought down U.S. insurance giant American International Group Inc. (AIG) in 2008.

According to the report on the Web site of the Financial Services Agency, the International Association of Insurance Supervisors agreed at a meeting in Taiwan last week to draft a rough outline of universal solvency margin requirements and other rules for major insurers by January, when the association's executive is scheduled to meet.

The FSA's insurance supervisors are members of the IAIS, which represents regulators from around 140 countries.

People familiar with the matter told Dow Jones Newswires the January deadline is much more ambitious than an initial timeframe of 15 to 20 months from June.

Moving the schedule up underscores a determination to bring insurers that operate internationally, such as AIG, Prudential PLC (PUK) and MetLife Inc. (MET), under global oversight to pre-empt further crises, the people said.

The IAIS doesn't want to let international momentum to tighten checks on major insurers "fade away by unnecessarily extending the discussion period," one of the people said.

The solvency margin ratio is a key gauge of how much capital an insurer has, measured against risks. The higher the ratio, the better-equipped a firm is if faced with unexpected investment losses or a surge in claims.

According to the FSA report, a central element of the IAIS rules would be that the solvency ratio requirements be applied to all of an insurer's group companies - including non-insurance businesses - rather than just the insurer itself.

The crisis that nearly wrecked AIG last year stemmed from huge losses by a U.K. subsidiary that had guaranteed high-risk investments, which later turned sour.

Neither the unit nor AIG as a group had sufficient buffers to manage the crisis, partly because U.S. regulations lacked group-wide capital requirements.

The IAIS is unlikely to propose any specific ratios in January. That could take a couple of years, the people said.

But the "basic thinking" over how regulators should calculate ratios should be determined by then. That would provide hints on how high the ratios will be.

In the coming months, the IAIS will also mull rules over investment, governance, risk-management and auditing by insurers, the FSA report showed.

The IAIS will consider other sensitive issues, such as whether to allow governments to ban insurers from moving capital across the globe - something they may wish to do to protect policyholders when a crisis hits global insurers, according to the report.

Another topic will be how much influence regulators should have over foreign insurers.

To be sure, the AIG debacle has led the U.S. government to include plans to oversee all insurer group companies, including non-insurance units operating overseas, in recent proposals for domestic regulatory reform. Europe is also moving toward its own oversight regime, called Solvency II.

But global regulators still think universal rules are needed. That is partly because, while solvency requirements exist in advanced economies, such rules vary by country, making it hard to effectively oversee big insurers.

The IAIS move toward universal rules is in line with a mandate from the leaders of the G20 countries last November, which was triggered by the U.S. federal bailout of AIG that now tops $180 billion.

But the IAIS project could take years to finalize, given that governments must iron out their competing interests, as well as carry out feasibility studies.

U.S. state regulators, which supervise insurers in the absence of a federal regulator, have been reluctant to act quickly. But Asian nations, like Japan and China, seem eager to move ahead, the people said.

-By Takashi Nakamichi, Dow Jones Newswires; 813-6895-7558; takashi.nakamichi@dowjones.com